We present a diagrammatic and step-by-step analysis of price signaling quality. Because quality is a continuum on the real positive line, out-of-equilibrium beliefs need not be specified, i.e., every positive price is a positive outcome in equilibrium. We first study the behavior of the monopoly...

We study how learning affects an uninformed monopolist's supply and investment decisions under multiplicative uncertainty in demand. The monopolist is uninformed because it does not know one of the parameters defining the distribution of the random demand. Observing prices reveals this...

Most natural commons are subject to discontinuities and threshold effects, so their gradual depletion may result in a sudden irreversible loss of the associated ecological services. Yet, it is often impossible to locate these thresholds with certainty. We analyze this context using a variant of...

We study the effect of dynamic and investment externalities in a one-sector growth model. In our model, two agents interact strategically in the utilization of capital for consumption, savings, and investment in technical progress. We consider two types of investment choices: complements and...

We propose a novel methodology for forecasting chaotic systems which uses information on local Lyapunov exponents (LLEs) to improve upon existing predictors by correcting for their inevitable bias. Using simulated data on the nearest-neighbor predictor, we show that accuracy gains can be...

While the American episode of alcohol prohibition (1919-1933) is notorious and has been extensively studied, very little work has been done in a comparative international perspective. We contribute to this comparative international analysis by focusing here on the different path chosen by Canada...

In this paper, we address the dynamics associated with living-arrangement decisions of sick, elderly individuals. Using data from the Panel Study of Income Dynamics and its Parental Health Supplement, we construct the complete living-arrangement histories of elderly individuals in need of care....

In this paper, we test the hypothesis that computer use will lead to productivity gains only if the firm uses an appropriate set of organizational practices. Detailed data on organizational practices and workers. compensation are obtained through a Canadian longitudinal linked employer-employee...

In contrast to earlier work, we study the relation between the current account and interest rate differentials. To do so, we document the relation for international data. We then interpret this relation from a two-country, dynamic, general equilibrium environment. We finally confront the...